The Chevron Corporation has more than 100 “operational excellence” communities in place. One of those networks saved an estimated $30 million in damages by rapidly sharing information about the potential hazards of a gas-drilling technique that had caused problems in one location. Caterpillar Inc. has established more than 2,700 communities with more than 37,000 registered participants: employees, dealers, customers, and suppliers. The resulting quality and productivity improvements among dealers and suppliers were enough to justify the investment seven times over.
Despite the huge potential returns, few managers adequately invest in developing these kinds of networks and deliberately designing them to foster measurable business results. One reason for this is the misperception that networks, which are essentially self-governing communities, draw their energy from common enthusiasms and a shared sense of purpose and thus cannot be managed. Furthermore, some academics argue that communities of practice are emergent systems that must be allowed to form and evolve without direction.
But experience in real-world companies suggests that these entities can and should be actively managed, albeit not with conventional forms of management. Mandating goals and installing individual performance metrics can cause communities of practice to disintegrate, and indiscriminately throwing money (or collaboration software) at them without a clear set of priorities and a way of evaluating success can be equally wasteful. Success comes from applying the same rigor, time, and attention to the “soft issues” of designing and managing human connections that managers ordinarily apply to structural decisions about capital investment, logistics, and technology.
Cartography of Connections
The first step is to understand the existing patterns and relationships among community members. The technique of organizational network analysis provides a means of making these invisible collaborations visible. This well-developed analytic methodology traces its roots to the 1930s, when Jacob Moreno set out to map the relationships of people in social groups in an attempt to reliably represent the ways in which group dynamics (like friendships, ostracism, popularity, and unpopularity) emerge. Today the approach rests upon a foundation of complex mathematics and analytic possibilities. (See “On Trust and Culture,” by Karen Otazo.)
The sociogram, a tool of network analysis that Dr. Moreno pioneered, maps interactions among community members and can offer quantitative insight into the workings of the community. A typical map reveals at a glance the “network density” of the whole system (the number of actual connections among all members, relative to the theoretical maximum of connections from everyone to everyone) and the “individual centrality” of any person (the number of connections that he or she maintains to other community members). These factors can be assessed quantitatively along with other measures, such as “community cohesion” (which averages the shortest paths in a network — the smallest number of connections between any pair of people — and thus shows how close or distant the connections are in general). These measures help to identify the critical players in the network, such as the “natural brokers” — people who, because of their role or personality, tend to be located on more of the short paths between community members.
At Halliburton, such a map was created in 2002 of the links among the community members of the Completion Products and Services business unit. The business unit’s field experts — who work with oil producers to “complete” an oil well by converting it from exploration to production status — are located in oil-producing regions all over the world, including Saudi Arabia, Nigeria, Angola, Brazil, the Gulf of Mexico, Canada, and the North Sea. The initial sociogram showed self-contained, isolated spheres in each geographic locale. People in Nigeria talked mostly to others in Nigeria; the same was true in Saudi Arabia, Angola, Brazil, and so on. From every locale, however, there was continuous communication to the same three people, known as “global advisors,” who maintained offices in the Houston corporate headquarters and dispensed advice upon request.